Jason Furman, an economist who served under Barack Obama and now teaches economics at Harvard, said on Tuesday that President Biden’s proposed gas tax holiday would benefit oil companies, not consumers.

Citing the standard price incidence theory in economics, Furman explained that government cannot “decide who gets the benefits of a tax cut” because supply and demand is the determining factor, not big government patchwork. Furman said:

Whatever you thought of the merits of a gas tax holiday in February it is a worse idea now. Refineries are even more constrained now so supply is nearly fully inelastic. Most of the 18.4 cent reduction would be pocketed by industry–with maybe a few cents passed on to consumers. This is standard price incidence theory in economics–the government cannot decide who gets the benefits of a tax cut, it gets split between the two parties based on the responsiveness of supply and demand.

Furman added that because oil demand is high, helping consumers afford more gas would only benefit the producers:

If supply is not very responsive to price (the situation now) then most of the benefit of the tax cut will go to suppliers. The intuition is that if it was passed onto consumers they would want to consume more than could be produced–driving prices back up. And yes, demand really does respond to prices–which means that consumers are in less of a position to benefit from a gas tax holiday.

Furman’s condemnation of Biden’s proposal comes as global head of commodities at Goldman Sachs Jeff Currie on Thursday slammed Biden’s war on American energy for promoting green energy over longterm fossil fuel investments.

Currie maintained soaring energy prices are due to a lack of U.S. investment in the fossil fuel sector. “There is only one longterm fix to this problem and that is investment, harnessing large amounts of capital into this space to debottleneck it,” Currie said.

“What are the reasons for the lack of capital investment?” Currie asked. Naming ESG, environmental, social, and corporate governance, Currie explained too much focus on leftwing investment strategies is one of the main reasons the U.S. is unprepared for energy price shocks produced by a variety of factors.

Biden promised to wage war on American oil during his campaign for president. As president, Biden has followed through on his promises. Biden has driven up private and public financing costs of oil drilling, halted drilling on public lands, and canceled the Keystone pipeline.

Under Biden’s administration, gas prices have soared to record highs and have doubled since former President Donald Trump left office. According to the Energy Information Administration (EIA), Americans will pay $450 more for gas in 2022 than they did last year on an inflation-adjusted basis.

Follow Wendell Husebø on Twitter and Gettr @WendellHusebø. He is the author of Politics of Slave Morality.